June 28, 2016

DOL's New Persuader Rule: What Does It Mean for Employers?

2 min

In April 2016, the U.S. Department of Labor (DOL) published a new rule which dramatically changes reporting requirements under the federal Labor Management Reporting and Disclosures Act (LMRDA). The rule was set to take effect on July 1, but was enjoined by the U.S. District Court for the Northern District of Texas on Monday, June 27. The DOL is enjoined from implementing the rule on a national basis pending a ruling from a higher court, but employers should still be aware of the elements of the new rule as it relates to indirectly persuading employees on union organizing activity.

  • Under the new rule, employers and their advisors (attorneys and consultants) must report any agreements under which they indirectly attempt to persuade employees. Previously, employers and advisors were only required to report agreements under which they were engaged to directly attempt to persuade employees concerning their union representation and collective bargaining rights.
  • The DOL has stated that the new reporting requirement is applicable only to arrangements and agreements made on or after July 1, 2016, and to payments made pursuant to arrangements and agreements entered into on or after July 1, 2016. Even with the injunction, we recommend that employers make arrangements with advisors pursuant to the new rule prior to July 1, as appropriate.
  • Agreements entered into prior to July 1 should not be subject to new reporting requirements for indirect activity reporting, even if work performed pursuant to the agreement occurs after July 1.
  • Direct persuading requires reporting in all circumstances. The present injunction does not obviate that requirement.

We will keep you posted on the status of the injunction and other changes to the rule.